Joint VA Loans: Buying a Home With a Co-Borrower

VA home loans can provide valuable financing benefits for eligible veterans and active-duty service members. But what happens when a veteran wants to purchase a home with another veteran—or with someone who isn't their spouse?

That's where the rules surrounding joint VA loans become important.

A joint VA loan can allow an eligible veteran to purchase property with another borrower, but these transactions can be more complicated than a standard VA purchase loan. Who the co-borrower is, whether the other borrower has VA entitlement, how ownership will be divided and how much of the loan VA will guarantee can all affect the transaction.

If you're considering a VA loan in Annapolis, Anne Arundel County or elsewhere in Maryland, here's what you should understand about joint VA loans.

What Is a Joint VA Loan?

The Department of Veterans Affairs generally defines a joint loan as one in which a veteran and one or more other people are liable for the mortgage and own the property securing the loan.

Examples can include:

A veteran purchasing with another veteran who is also using VA entitlement
A veteran purchasing with another veteran who isn't using VA entitlement
A veteran purchasing with one or more non-veterans who aren't the veteran's spouse
Two married veterans purchasing together and both using their VA entitlement

Importantly, a veteran purchasing with a non-veteran spouse is generally not treated by VA as a joint loan. Likewise, if a veteran's spouse is also a veteran but isn't using their VA entitlement, VA generally doesn't treat the transaction as a joint loan.

Can Two Veterans Get a VA Loan Together?

Yes.

Two or more eligible veterans may purchase a home together using VA financing. Depending on the transaction, multiple veteran borrowers may use their VA entitlement.

VA calculates the potential guaranty for the overall loan and determines how the entitlement charge will be allocated among the veterans using their entitlement. When possible, entitlement may be divided equally, although VA provides procedures for situations involving unequal available entitlement.

This makes reviewing each veteran's Certificate of Eligibility (COE) an important early step.

How Does VA Entitlement Work on a Joint VA Loan?

VA entitlement represents the amount of the loan guaranty available to an eligible veteran.

When multiple veterans use entitlement on the same joint loan, VA determines the guaranty available for the overall transaction and the entitlement charged to the participating veterans.

The calculation can become more complicated when the borrowers have different amounts of available entitlement or when one borrower isn't using VA entitlement.

That's one reason a joint VA loan should be evaluated based on the actual borrowers, property and proposed loan structure rather than relying on a simple rule of thumb.

For veterans with full entitlement, VA doesn't impose a loan limit simply because of the VA program, although the lender must still determine that the borrower qualifies and the property's value must support the transaction.

Can a Veteran Get a VA Loan With a Non-Veteran Spouse?

Yes, assuming applicable VA and lender requirements are met.

But this is an important distinction: VA generally doesn't classify a loan between a veteran and their non-veteran spouse as a joint VA loan.

The spouse's income and financial obligations may be considered as part of qualification when applicable, but this is different from a veteran purchasing with an unrelated non-veteran co-borrower.

This distinction matters because true joint VA loans can involve different guaranty and underwriting requirements.

Can a Veteran Get a VA Loan With a Non-Spouse Co-Borrower?

Potentially.

A veteran may obtain a joint VA loan with one or more non-veterans who aren't their spouse. Examples might include a parent, sibling, unmarried partner or another person purchasing the property with the veteran.

However, VA's guaranty generally applies only to the veteran's portion of the loan when the other borrower isn't using VA entitlement.

That can affect the amount of guaranty available and may result in a down-payment requirement depending on how the transaction is structured.

These loans also require special underwriting considerations, so lender availability can be more limited than with a standard VA purchase loan.

Does a Joint VA Loan Require a Down Payment?

Not necessarily.

Whether a down payment is required depends on factors including:

Which borrowers are VA-eligible
Which borrowers are using VA entitlement
The amount of available entitlement
The veteran's ownership interest
The purchase price and appraised value
The amount of VA guaranty available for the transaction
Applicable lender requirements

For borrowers with remaining rather than full entitlement, the amount of available entitlement can affect whether a down payment is necessary. VA explains that lenders may require entitlement, a down payment, or a combination of the two sufficient to provide the required guaranty coverage.

Because joint loans can involve several borrowers and different entitlement situations, the calculation should be completed for the specific transaction.

What Are the Occupancy Requirements for a Joint VA Loan?

VA home loan financing is intended primarily for homes that meet applicable VA occupancy requirements.

The precise requirements can depend on who is using VA entitlement and the structure of the joint loan. Borrowers shouldn't assume that adding another borrower eliminates VA's occupancy requirements.

VA home loan eligibility generally includes occupancy requirements in addition to credit and income requirements.

If one or more borrowers won't occupy the property, the transaction should be reviewed carefully before making an offer.

Can Joint VA Loans Be Used to Buy an Investment Property?

A VA purchase loan isn't designed simply to finance a traditional investment property that none of the eligible borrowers intends to occupy as required.

However, VA financing may potentially be used to purchase certain multi-unit properties when applicable VA occupancy and property requirements are satisfied.

That's different from purchasing a property solely for investment purposes.

Borrowers considering a multi-unit property should have the proposed occupancy and property structure reviewed before assuming it will qualify for VA financing.

Do Joint VA Loans Have Different Underwriting Requirements?

They can.

Joint VA loans involving borrowers other than a veteran and spouse are subject to special VA underwriting and guaranty considerations.

The lender will still evaluate factors such as income, debts, credit history, assets and the borrower's ability to repay the mortgage.

VA itself doesn't establish a universal minimum credit score for VA-backed loans, although individual lenders may establish their own credit requirements.

What Should Co-Borrowers Consider Before Buying Together?

The mortgage is only one part of jointly owning a home.

Borrowers purchasing property together may also want to consider how ownership will be structured and what happens if circumstances change.

Questions worth discussing can include:

How will ownership of the property be divided?
How will mortgage payments and other housing expenses be shared?
Who will be responsible for repairs and maintenance?
What happens if one owner wants to move?
What happens if one borrower wants to sell their interest?
How could a future refinance or sale affect the veterans' VA entitlement?

For questions involving ownership rights, estate planning or agreements between co-owners, borrowers should consider obtaining appropriate legal advice.

How Do You Start a Joint VA Loan?

A good first step is determining the VA eligibility and available entitlement of each veteran who plans to use VA benefits.

A Certificate of Eligibility helps establish a veteran's VA home loan eligibility and available entitlement. Veterans can request a COE through VA or, in many cases, through their mortgage lender.

From there, the lender can review the proposed borrowers, income, debts, property and ownership structure to determine how the transaction may be structured.

Is a Joint VA Loan Right for You?

A joint VA loan can provide an option for veterans who want to purchase property with another veteran or certain other co-borrowers.

But these transactions can be considerably more complex than a standard VA loan between a veteran and spouse.

Before making an offer, it's helpful to determine:

Who will be borrowers and owners
Who is VA-eligible
Which veterans will use entitlement
How much entitlement is available
Whether a down payment may be required
Who will occupy the property
How the VA guaranty will apply

Understanding those details early can help avoid surprises later in the mortgage process.

Explore Your VA Loan Options

Every joint VA loan scenario is different.

Redwood Mortgage Services can help veterans and military families review VA eligibility, available entitlement and potential financing structures before making an offer on a home.

For a broader overview of VA purchase loans, entitlement and other VA financing options, visit our VA Home Loans in Annapolis, MD page.

All loans subject to approval. Equal Housing Lender.

Frequently Asked Questions

Can two veterans use their VA benefits to buy a home together?

Yes. Two or more eligible veterans may be able to purchase a home together using VA financing and contribute VA entitlement toward the transaction. The amount of entitlement used by each veteran will depend on the structure of the loan and their available entitlement.

Can I use a VA loan with someone who isn't a veteran?

Potentially. A veteran may be able to obtain a joint VA loan with a non-veteran who isn't their spouse, such as an unmarried partner, parent or sibling. These transactions have additional guaranty and underwriting considerations and may require a down payment.

Is a VA loan with a non-veteran spouse considered a joint VA loan?

Generally, no. VA generally doesn't classify a loan between a veteran and their non-veteran spouse as a joint VA loan. This distinction is important because true joint VA loans are subject to different guaranty and underwriting considerations.

Do joint VA loans require a down payment?

Not necessarily. Whether a down payment is required depends on factors such as which borrowers are using VA entitlement, available entitlement, ownership interests, property value and the amount of VA guaranty available.

Can you use a joint VA loan to buy a multi-unit property?

Potentially. VA financing may be used for certain multi-unit properties when applicable VA property and occupancy requirements are satisfied. A VA purchase loan isn't intended to finance a property solely for investment purposes when applicable occupancy requirements aren't met.

Joint VA Loans: Buying a Home With a Co-Borrower